China to REVERSE stance on Bitcoin?

Boxmining avatar Boxmining
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Description

Chinese media established that people have the freedom to trade Bitcoin - is this a reversal in the trend to ban BTC? We also speak to Erik (Covalent) on the latest happenings and upcoming trends in t...

AI Analysis

This video dives into some major shifts in the crypto space, from surprising news out of China about Bitcoin's legal status to the buzz (and reality) of the Bitcoin Miami conference. It also gives an insightful look into the current market sentiment, why trade activity is low, and how data infrastructure projects like Covalent are becoming crucial for the evolving decentralized finance (DeFi) ecosystem.

Here’s a breakdown of what's happening:

* China's Potential Bitcoin Reversal: There's a big headline from Xinhua News, a major Chinese government-owned publication, stating that Chinese citizens have the right to own Bitcoin. This is a massive shift from China's past aggressive crackdown on crypto exchanges and over-the-counter (OTC) desks, which have historically been a no-go for crypto access. It suggests a potential reversal in China's stance, which could significantly impact the market.

* Bitcoin 2021 Miami Conference: The conference is a big deal, featuring prominent figures like Ron Paul, Michael Saylor, Jack Dorsey, and Tony Hawk. While many hoped this conference would drive up Bitcoin's price due to increased interest and adoption, the market actually experienced a dip in the hours leading up to and during the start of the conference. This "buy the rumor, sell the news" phenomenon has been observed in past crypto conferences, where prices tend to fall once the event begins. The conference is very Bitcoin-focused, emphasizing maximum participation and discussions about scaling Bitcoin via the Lightning Network, with little to no mention of Ethereum or broader DeFi.

* Market Recap and Low Trading Activity: The general crypto market is experiencing very low trade activity, which is reflected in how exchanges are trying to stimulate interest. Coinbase, for example, is giving away $1.2 million in Dogecoin (DOGE) and actively trying to re-stimulate retail interest after their share prices fell post-IPO. This strategy is clearly aimed at boosting trading volumes for their Q2 and Q3 reports.

* Meme Coins vs. DeFi Value: When asked about meme coins like Super Shiba, the general sentiment is to avoid them for now. While meme coins were great for initially attracting people to crypto, the real "sexy" money and innovation are in DeFi. Looking at "Crypto Fees," decentralized exchanges like Uniswap (both v2 and v3) are generating millions in weekly trading fees. This highlights the immense value creation with small teams, showing how much disruption and scaling can happen in the financial sector compared to traditional banking.

* Market Strategies and Outlook:
* Expect continued volatility in the coming days, especially with the Bitcoin Miami conference. When major buyers and supporters are at a conference, they might not be actively buying or selling, leading to higher price swings.
* Ethereum is currently sitting in a "golden cage," resisting movement around $3000. There's a pattern of minor dips on weekends due to lower institutional investor volume and increased fear, but it's rare for this "lightning to strike three times."
* The strategy for now is to observe the major coins like Bitcoin, Ethereum, and BNB, as their movement dictates the pace for altcoins. If Ethereum can break past $3000, it's a strong indicator for an aggressive entry into both Ethereum and the broader Ethereum ecosystem, with a target of $3300 for that breakout.

* News Lightning Round:
* Google's Crypto Ad Rules: Google is clarifying its ad rules for crypto exchanges and wallets, requiring companies to reapply under new guidelines. This indicates Google is adapting to the crypto market.
* Steve Wozniak vs. YouTube: Apple co-founder Steve Wozniak sued YouTube for allowing fake Bitcoin giveaway scams that used his image. Unfortunately, the California court ruled in YouTube's favor, which is a letdown for those hoping to curb these prevalent scams.
* New Money Entering Crypto: Mike Novogratz's Galaxy Digital announced a $100 million crypto venture fund, and Guggenheim's new fund may also seek Bitcoin exposure. The Miami mayor also bought Bitcoin after the $1.9 trillion stimulus bill passed. This shows more institutional investors and politicians are getting into crypto.
* Norton and Ethereum Mining: Norton antivirus previously flagged Ethereum miners as potential viruses but no longer does so, making mining more accessible.
* Olympic NFTs: The Olympic Committee is launching official NFT pins for upcoming games, showcasing how major global organizations are catching onto the NFT trend as a new revenue source for artists and companies.
* Kusama and Altcoin News: Kusama attracted a $30 million investment from Master Ventures, an Asian blockchain incubator. In altcoin updates, Outcome Finance (a Cardano-based launchpad incubator) launched liquidity mining with a strong APY, and TrustSwap soft-launched its "mint" feature.

* Deep Dive with Covalent (Erik):
Erik's Background: Erik got into crypto in 2013-14 while trying to solve music royalty accounting problems using blockchain. He knew Covalent's CEO, Ganesh, who had the foresight to start building a comprehensive database of all* smart contract data, even before DeFi truly existed, believing it would eventually be useful.
* What Covalent Is: Covalent is a data infrastructure layer for blockchains. It pulls large amounts of on-chain smart contract data, not just simple price feeds. This includes detailed information like Uniswap balances over time, wallet contents, total value locked (TVL) for protocols, and historical transaction data, which can even be used for tax purposes or building complex dashboards.
* Why It's Useful Now: The explosion of DeFi and NFTs has created a massive need for organized, accessible on-chain data. Covalent enables various use cases, such as identifying NFT wash trading (where prices are artificially inflated by self-dealing), allowing blockchains like Binance Smart Chain (BSC) to analyze active protocols and TVL, and helping wallets pull multi-chain asset data.
* Business Model: Covalent currently offers its API for free to developers to bootstrap its ecosystem. They previously had a revenue model but decided against charging upfront because many dApps haven't found product-market fit yet. The CQT token is used on the backend for validators who fulfill data queries as the network decentralizes, ensuring compensation without requiring upfront token payments from users.
* The Name "Covalent": It comes from "covalent bond" in chemistry, signifying how they bind databases and bring blockchain data together.
* Decentralizing Big Data: Covalent is essentially decentralizing "big data" for blockchains, similar to Google Trends but providing the raw data for anyone to build their own analytics tools. An example given was a user who built a risk-scoring system for liquidity pools, identifying pools with only a few large "whale" holders.
How Data is Stored: Covalent does not* store data on the blockchain, as that would be too slow and expensive. Instead, they create a one-for-one mirror of the blockchain data in centralized storage (like AWS or Google Cloud) using SQL, a stable and widely understood database language.
* Covalent vs. The Graph: A key distinction lies in their architectural approach:
* The Graph (ETL - Extract, Transform, Load): Requires developers to define and build "subgraphs" for specific data needs, similar to formatting individual Excel sheets. Each subgraph is isolated, and integrating data across different subgraphs or chains requires more work.
* Covalent (ELT - Extract, Load, Transform): Acts like one massive, pre-loaded Excel sheet containing billions of rows and columns of all on-chain data. Developers simply "ping" the API to pull specific data points, making it much more lightweight, faster to deploy, and easier for multi-chain data queries.
* Getting Involved: Developers, data scientists, or anyone interested can explore Covalent's API for free, join their Discord community, or check out their "Alpha Alarms" tool for real-time insights powered by Covalent data.

* Elon Musk's Influence: The ongoing discussion about Elon Musk's tweets affecting the market is acknowledged. However, the sentiment is that too much emphasis is placed on him, and his erratic behavior means his tweets should largely be ignored as the market is becoming more resilient.

* Final Thoughts: The market is showing resilience, with many viewing dips as buying opportunities. The emphasis is on finding "real value" in the space, particularly in DeFi and infrastructure projects, rather than chasing meme coins.

Transcript

all right guys welcome back to another live stream episode of box mining here it's michael here and today we have a packed episode on what is happening on the cryptocurrency front and as you guys probably know right it's no surprise out there that there is a lot of chatter on crypto going on right now especially stuff that's going on in the bitcoin conference in miami there is a pretty big one right now uh featuring a lot and a lot of esteemed guests i mean i should just make sure i share my sc...